Plummeting oil production levels in Iran and Venezuela are generating major rises in the global price of oil, but this may be offset by rapidly rising US shale oil production, Fitch Ratings said in a press release on Thursday.
WASHINGTON (Pakistan Point News / Sputnik - 11th October, 2018) Plummeting oil production levels in Iran and Venezuela are generating major rises in the global price of oil, but this may be offset by rapidly rising US shale oil production, Fitch Ratings said in a press release on Thursday.
"Iranian and Venezuelan oil production levels, along with the pace of US shale growth, will drive oil prices in the medium term," the release said.
Fitch explained that Iranian oil production levels will continue to drop drastically as a result of US economic sanctions while Venezuela's ongoing political and economic crisis will also continue to cause oil production to shrink.
"Upcoming US sanctions against Iran already caused the country's output to drop by 350 thousand barrels per day in September. We believe at least 1 million barrels per day may be at risk unless sanction waivers and exemptions remove pressure to cut production further," the release said.
Combined production declines in Iran and Venezuela could reach 2 million barrels per day, Fitch cautioned. However, US shale growth could help the oil market revert to a more balanced state in 2019 with prices moderating, the release said.
